City Government

The City's New Housing Subsidy

The city has run out of Section 8 vouchers, the federal rent subsidy that has been its main weapon in fighting homelessness. City officials have proposed a new subsidy program, to be financed by city, state and federal money, to replace Section 8, which will be called Housing Stability Plus. Homeless advocates are not impressed.

The drying up of Section 8 vouchers and the new subsidy were the focus of a heated public hearing of the City Council’s General Welfare Committee on December 1st.

The Section 8 rent subsidy program helps working poor people pay their monthly rent. People on Section 8 are expected to spend a third of their income on rent; the subsidy covers the difference up to “fair market rents” determined by the U.S. Department of Housing and Urban Development.

About 120,000 New Yorkers are on Section 8, which is primarily administered by the New York City Housing Authority. About 150,000 people are on the waiting list for Section 8, which has been closed for about a decade.

Warning signs that Section 8 would run out have been evident for more than a year. In October, the city sent letters to people in the process of being certified for the assistance informing them that they would have to use their vouchers by December 19. But that date turned out to be wrong. The vouchers apparently ran out just before Thanksgiving.

“The city has broken its promise to these people,” Patrick Markee, senior policy analyst at the Coalition for the Homeless, told the committee. “They took away the relocation program without anything up and running.”

Many of the homeless families who saw their Section 8 vouchers evaporate would likely end up in New York City Housing Authority apartments, the housing authority’s general manager told the committee. But city officials had few concrete answers for these people except to wait and see about the new proposed subsidy.

The people were seething at the committee hearing, particularly women in domestic violence shelters who are awaiting housing placements. Those shelters allow women to stay for only a limited time.

The city’s proposed subsidy to replace Section 8 is still being negotiated, although city and state officials told the committee that all of the major issues relating to it had been ironed out. The officials said the city is continuing to press the federal government for renewed Section 8, but by creating a new subsidy, some advocates questioned the mayor’s and governor’s commitment to New Yorkers.

“We urge the city not to give up on Section 8,” said Lauren Bholai-Pareti, executive director of the Council on Homeless Policies and Services. “The mayor and the governor should come together to assure we get that assistance.”

Without Section 8 to help place homeless families in permanent housing, city officials said the city would face a huge financial burden putting or leaving people in shelters without some sort of subsidy program. The city pays about $90 a night to house homeless families, or almost $3,000 a month, and its homeless services budget, much of which goes to pay for shelter, has nearly doubled since 1999, to about $700 million.

“Without this (subsidy), the shelter system would quickly grow,” Linda Gibbs, the city’s homeless services commissioner, told the city council committee. “Our hope is that in a matter of days we will see approval. The major issues have been resolved.”

Councilmember Bill de Blasio, the committee’s chairman, said the city’s proposal was a positive step, even if flawed.

“Before Washington cuts us off, you put something into play that is sort of an inoculation against that,” he said. “I appreciate that.”

The subsidy, Housing Stability Plus, would cost about $58 million annually, city officials said, money that would simply be shifted in the city and state budgets for public assistance.

“The state can cover it,” said Robert Doar, commissioner of the state’s Office of Temporary and Disability Assistance. “It takes time to review all the aspects of the plan. We’re getting close to an agreement on what this will cost.”

But advocates rejected the new subsidy. It significantly differs from Section 8, they said, in very negative ways.

Unlike Section 8, recipients of Housing Stability Plus assistance would have to be on public assistance and the subsidy would decline by 20 percent annually until it ran out after five years. Gibbs told council members that the decline was intended to encourage poor families to become self-sufficient. But asked what the families would do if they could not pay what in effect would be a 20 percent increase in their rent, she said the agency was hoping they could pay it.

“We’ll make changes as needed,” she said. “The focus is making it work. We’ll figure out how to make it work.”

But she said people who could not become self-sufficient would have to look elsewhere for help: “This program may not be for them,” Gibbs said. “There are other service systems” that would help them.

But decreasing rent for families on welfare would not encourage self-sufficiency, said Paige Sayle, director of community relations and advocacy at the Partnership for the Homeless. People who receive public assistance have their benefits cut if they earn too much money. So, the families would likely “turn down jobs or take low paying jobs in order to keep their rent subsidy,” she said.

Decreasing rents could also discourage landlords from accepting the subsidy, advocates said, a point one landlord acknowledged.

“If someone’s homeless and doesn’t have a job then you know their income is going to be an issue,” said Frank Anelante, president and CEO of Lemle & Wolff, which manages over 300 buildings in the city. “That’s a problem.”

Gibbs assured the council that landlord partners of the homeless services department had said they would accept the subsidy.

It was unclear at the hearing what would happen to working poor families who do not qualify for public assistance. It was also unclear whether landlords would accept the subsidy that, unlike Section 8, offers no incentive payment to landlords for taking homeless families and declines each year.

“There are a lot of questions,” said Councilmember Gale Brewer. “We’re all wondering how this will work. And we wonder about the priorities.”

The new subsidy would pay lower rents than what Section 8 pays, another flaw advocates pointed out. Gibbs said the proposed maximum rents the subsidy would cover, based on family size, were still competitive. A family of four that qualified could rent an apartment at $925 a month in the first year of receiving Housing Stability Plus. A family of six would receive up to $1,176 a month in the first year.

“There has been a constant issue with the fair market rents,” said Steven Banks, the Legal Aid Society’s attorney-in-chief. “This is even lower.”

Added to the financial issues, the new subsidy also differs from Section 8 in what quality of apartments it would pay for. While Section 8 has famously rigorous standards that disqualify apartments with violations, the new subsidy would not impose standards that are as strict. Advocates said the city would end up putting homeless families in unsafe and unhealthy apartments under the new subsidy.

The flaws in the subsidy were somewhat beside the point, advocates said. That the city had clear warning signs that Section 8 would run out and did not do enough sooner was an indication of the wrong priorities, they said.

“There has been a 63 percent increase in homelessness since 1999,” Banks said. “That reflects need. The city needs to spend money on housing. It’s all about rent. That’s the flaw in the current proposal.”

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